Markets advance to new 2009 highs

Stocks started strong & remained higher all day. Dow is shooting for 10K first reached almost 11 years ago. Today Dow rose 51 to 9829 closing near the highs. However it has been flat near 9800 for 4 days. Advancers were over decliners 5-2 & NAZ was up 8. Banks soared again, the Financial Index made another yearly high. The index is up more than 150% from its low earlier this year. When troubled financial giant Citigroup (C) doubles in 2 months, all financials are "golden." Speaking of risky financials being rewarded, AIG (AIG) has had an even better run over the 2 months.

S&P 500 FINANCIALS INDEX

Value 206.62

Change 4.54

% Change 2.2%

Citigroup --- 2 months




AIG --- 2 months





MLPs were little changed, the index was virtually even & hurt by a large offering of new units. Enterprises Products Partners (EPD) was down 73¢. The Dow Jones REIT Index was up 5+ to a new closing high for 2009. Junk bond funds were sideways at their high levels for 2009. The yield on the 10-year Treasury bond fell 3 basis points to 3.46%.


Alerian MLP Index --- YTD




Dow Jones REIT Index --- YTD





The dollar continues very weak thanks to the heavy gov borrowing. The € is at $1.48 & it only takes 91+ Japanese ¥ to buy a dollar. With the dollar weak, money flows into commodities & stocks. Oil has been kicking around 70+ since its run up in late May. In roughly the same time frame gold has taken off, from the mid 800s to 1K+ & it wants to go higher.

CLV09.NYM

..Crude Oil Oct 09

..71.55

.. 1.84 ......(2.6%)

GCU09.CMX

..Gold Sep 09

..1,014.00

.. 10.30 ......(1.0%)

The Treasury sold a record $43B in 2-year notes at an annualized yield of just over 1%, in line with expectations. Demand was good including from foreign interests (indirect bidders). Buyers were motivated by the outlook for low inflation & a low growth rate for the US economy.

Treasuries Gain on Growth Outlook Before $43 Billion Note Sale


The Federal Reserve is not expected to change interest rates at their meeting & should continue with accommodating language for the markets. We all know the economy is mending, not a lot for them to say.

Dow Jones Industrials --- YTD